INDRADHANUSH PAINTS LIMITED

Case Synopsis

The case talks about the firm named INDRADHANUSH PAINTS LIMITED (IPL).

Founded in early 1940s, it had developed its wide distribution network across India by 1960s.

At the inception of IPL the paint industry was dominated by multinationals like

- ICI

- British Paints

- Goodlass Nerolac

- Others

Growth of IPL

Multinationals functioning in 1940s concentrated only on the Urban areas.

IPL identified this opportunity and entered the rural markets.

Company started of with small distributors as the large ones were under the control of multinationals.

It also identified preferences of the rural markets and modified its products accordingly.

IPL’s scenario in 1993

It is one of the largest paint companies with four manufacturing units.

It produces entire gamut of decorative and Industrial paints quality of which is comparable with best in the world.

It is a market driven company having 47 sales offices throughout the country.

It has presence in all settlements with a population of at least 5000 persons.

Product Range of IPL

Enamel Paints

Liquid Paints

Distempers

Aluminium Paints

Wood Finishes and Varnishes

Stainers

Patti and Fillers.

Of these, the first three items had substantial sales in rural areas.

As purchasing power in the rural market was low, the company introduced paints in small tins of –

-50 ml

-100 ml

-200 ml

Distempers however were in one litre packs.

These small packs gave the company the following benefits -

-competitive advantage,

-added USP to the product

-Loyal customer base

Issue faced by the company

The sales force working with Mr. Gupta, the current in charge of the rural marketing operations, reported decline in sales during the past nine months when compared YOY with last year.

The rural market share of the company had dipped from 45% to 43%.

Task before Mr. Gupta was to present the reasons for the fall in the market share and also the future plans to increase the market share.

Also in 1993 there was drought because of which the entire paint industry was declining.

COMPETITION

Organized Market: Branded products, high

in quality, high price, caters to geographical

distributed markets.

Unorganized market: Low quality products,

low price, low overhead costs, lower excise

duties, caters to markets of geographic proximity etc.

Orga-nized sector40%Unor-

ganized sector60%

Rural Paint Market

Organized sector

Unorganized sector

MARKET SHARE OF IPL IN ORGANIZED SECTOR

IPL31%

Goodlass Nerolac15%Berger paints

11%

Others43%

Market Share of Organized market

IPL Goodlass Nerolac Berger paintsOthers

Survey results – 1989 & 1993

Types of materials

Proportion used in households Prices of Material

Survey 1989 Survey 1993 Survey 1989 Survey 1993

Chuna 63% 15% Rs. 22 Rs. 25

Cheaper paints and distempers 2% 45% Rs. 55 Rs. 62

IPL Harvester distemper and

paints35% 40% Rs. 70 Rs. 80

Survey: Observations

Survey 1989

Chuna was difficult to use.

IPL distemper ‘Harvester’ was superior to chuna; but was expensive.

Unorganized sector used low price as USP.

Paints were used for painting horns of animals & front entrance door of

houses.

Distempers were used for color washing the walls of the houses.

Demand was seasonal i.e. during festivals.

Another 400 units of unorganized sector wereupcoming.

Survey: Observations

Survey 1993

IPL distemper and paints were good quality but were expensive.

Unorganized sector sold materials to the rural retailers directly.

Consumers were switching to paints from chuna.

Survey: Consumer Expectations

Survey 1993

Distempers & paints should be inexpensive and affordable.

Shades should be available in dark and strong colors.

Distempers and paints should not be hazardous to health.

Offering: Decoration

Benefits: Decoration of walls.

Decoration of horns of bulls/bullocks/cows.

Decoration of wheels and body of bullock carts.

Benefits Received

Competition level

•House repairs•Furniture•Household utensils/showpiece

Desire Level

•Wallpaper•TilesGeneric Level

•Chuna•SanguineForm Level

•Goodlass Nerolac•Berger Paints•Other paints and distempers

Enterprise Level

Benefit: Decoration of walls

Competition level

•No decoration•MaintenanceDesire Level

•Garlands•Ribbons & bells•Decorative cloth

Generic Level

•Kumkum•TurmericForm Level

•Goodlass Nerolac•Berger Paints•Cheaper paints

Enterprise Level

Benefit: • Decoration of horns of bulls/bullocks/cows.• Decoration of wheels and body of bullock carts.

Marketing Plan

Planning UnitANALYSE ORGANISATION

Research Unit

• Mission

•Goals

• Strengths

• Weakness

MAPPING ENVIRONMENT

- Technological

-Economic - Cultural

ORGANISATIONAL OBJECTIVES

Set Marketing Mission, Goals

Develop Core Marketing (STP)

Marketing Mix

Implement

Assess Performane

Compare

Determine Performance Benchmarks

• Product

•Price

•Place

•Promotion

Planning Unit

Mission Keep on increasing market share by 5% every following year.

Goals

To be the market leaders in Rural sector and have considerable share in urban areas.

Research Unit

Strength:IPL had comparative advantage over traditional Chuna & as survey revealed people were switching to distemper & other color paints.

Weakness:Distemper had only one gaudy shade that was RED.

Pricing Strategy was inappropriate according to the market

Mapping Environment

Economic:Preference was for cheaper product.

Cultural:

Paints were preferably used during festive season.

Organization objective:

To increase the market share from 43% to45%in the current year.

Marketing Mission:

To increase the sales of the product.

Marketing Goal:

To have a competitive edge over others.

Develop Core Marketing (STP)

Segmentation:

Psychographic

Target:

People who have cemented house, bullock carts and bullock.

Positioning:

Paints that stay long.

Marketing mix-4P’s

Product: increasing the product depth and using attractive packaging.

Price : using market penetration strategy.

Promotion: Using radio, colourful banner. using haats and melas as place of distributing channels

as free sample.

Promotion

Implement Determine performance benchmarks Assess the performance Compare

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